USD/CAD Daily Forecast – Canadian Dollar Is Under Pressure

USD/CAD Video 02.04.21.

U.S. Dollar Moves Higher Against Canadian Dollar

USD/CAD is currently trying to settle back above the resistance at the 20 EMA at 1.2570 while the U.S. dollar is flat against a broad basket of currencies in holiday-thinned trade.

The U.S. Dollar Index is trying to settle above the resistance at the 93 level. In case the U.S. Dollar Index manages to settle above 93, it will move towards the resistance at 93.20 which will be bullish for USD/CAD.

Today, the U.S. released Non Farm Payrolls report which indicated that the U.S. economy added 916,000 jobs in March. Analysts expected that the economy would add 647,000 jobs, so the report was much better than the analyst consensus.

Unemployment Rate declined from 6.2% in February to 6% in March, in line with the analyst consensus. The reports highlighted the robust rebound of the U.S. economy which may provide additional support to the U.S. dollar.

Foreign exchange market traders will also continue to monitor the developments in U.S. government bond markets. Today, bond markets are closed, so traders will have to wait for Monday to find out whether Treasury yields continued to pull back from recent highs. If traders sell bonds and move their money into inflationary assets like stocks after the release of positive job market data, Treasury yields will quickly get to new highs which will be bullish for the American currency.

Technical Analysis

USD to CAD is testing the nearest resistance at the 20 EMA at 1.2570. In case it manages to settle above this level, USD to CAD will move towards the resistance at 1.2590.

A successful test of the resistance at 1.2590 will open the way to the test of the resistance at the 50 EMA at 1.2615. In case USD to CAD gets above the 50 EMA, it will move towards the resistance at 1.2665.

On the support side, the nearest support level for USD to CAD is located at 1.2550. If USD to CAD declines below this level, it will move towards the support at 1.2525. A move below the support at 1.2525 will push USD to CAD towards the support at 1.2500.

For a look at all of today’s economic events, check out our economic calendar.